COVID-19: How to Successfully Manage Personal Finances

These are times when we need to be extra careful about how we handle our finances. On the one hand, some companies have started laying off employees because of the drastic fall in business during the last couple of months. So we need to be prepared for the worst.

The good news is that we can all start managing our finances better, and that should see us safely through this crisis.

Here are some tips on how to manage your money and keep your debts under control, at least until the economy is set to revive.

Never panic

Don’t do anything in haste or fear. Selling off your stocks or assets in a hurry will only hurt you at this juncture. Take calm decisions and try to wait out this period. What does down always come up? So wait for it.

Cut down on expenses

If you are someone who loves going to malls every weekend and take out the family for dinner almost every day, you need to find alternative ways of entertaining the family – experiment by cooking a meal at home with the entire family. Your family will understand since they are also aware of the dangers of going out. Reduce these outings, and you can save a lot of money.

Ask each member to contribute

Sit down with the family and have a joint discussion on where you can cut down unnecessary expenses. Ask each member of the family to offer an idea of how they can help in saving money. And try to suggest or get ideas on alternative ways of enjoying yourselves.

Do not lose heart

Even if you do lose your job, do not take it personally. It has nothing to do with your caliber. Take up the next best thing you can get – freelance or ask your friends if there is an opening in their company. Many companies will be looking for good people at this juncture, so spread the word.

Savings is your best bet

With the economy being shaky right now, place your bet on savings. Save as much as you can so that you have enough money just in case the pink slip rears its ugly head, or you are asked to take a pay cut. It is better to be prepared than to be sorry later.

Reduce debts

If you have a housing loan and other EMIs, try to pay these off by cashing in low yielding mutual funds of FDs. Do not add debts like credit cards, and don’t borrow from friends or family. Usually, it is not the home loan that creates a problem, but the addition of high-cost debts like credit cards and additional loans that weigh us down.

Keep learning and upgrading your skills

It is your skills which will keep you afloat in the long run. So keep studying and adding to your skill sets. Use the additional time to hone your abilities and learn things you always wanted to. Join a course, and stay busy.

Keep these points in mind over the next few months. Don’t commit to spends in any way. Don’t take chances or gamble. Keep at least ready cash or liquid assets of about two to three months’ salary handy so that you don’t suffer a shock if something untoward happens.

Keep calm at all times, and you should be fine. This is not the end of the world. Remember, this too shall pass.

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